21st Century Fox is looking to possibly make a joint bid for Tribune Media as part of a joint venture with private equity firm Blackstone.
The Financial Times reported Sunday that the companies are looking to beat out an offer from Sinclair Broadcast Group. A source familiar with the situation confirmed that the companies were in talks, but said a bid may not materialize.
Both Tribune and Sinclair own TV stations.
As part of the joint venture, Blackstone would pony up the cash, while Rupert Murdoch's Fox would contribute its TV stations, the source said. The joint venture would have more scale with Fox's 28 and Tribune's 42 stations.
Neither Fox nor Blackstone have commented.
Analysts said that a possible change to the 39.6 percent national ownership cap could allow the venture to pursue more deals over time.
"We think Fox's interest could be in large part defensive to prevent Sinclair from gaining greater leverage in reverse comp negotiations (Sinclair already owns 54 Fox affiliates)," RBC Capital Markets analyst Steven Cahall said Monday.
"We don't really get it," Wells Fargo analyst Marci Ryvicker, meanwhile, said in a research report, in which she also wrote: "We don't love this strategy for Fox, although do believe the financial risk would be mitigated via Blackstone."